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Oakajee push part of royalties rebate

A royalties payment reprieve for magnetite iron ore miners was in part designed to resuscitate the shelved Oakajee port project in Western Australia, Premier Colin Barnett says.

Mr Barnett chose the official opening of the state's first magnetite mine in the Mid West on Tuesday - a joint venture between Perth's Gindalbie Metals and China's Anshan Iron and Steel Group - to announce a 50 per cent royalty rebate for the first 12 months of magnetite production.

Asked about the largesse after farmers complained they needed more help than the mining industry, Mr Barnett described it as an act of goodwill.

He said magnetite mining was capital intensive as processing was required, unlike the hematite iron ore mined in the Pilbara, so the industry needed assistance to get going.

"It's trying to build confidence in what is an emerging, high-value part of the mining industry, also to keep a good relationship with China and build that, and also to try and get enthusiasm for Oakajee.

"It's a goodwill gesture to the Chinese companies.

"And let's face it, Australian policy out of Canberra to China on mining has been awful. What I'm trying to demonstrate is that Chinese investment is welcome here and we'll take a partnering approach."

He said Anshan would be a major sponsor of the project if it went ahead.

And there was still a possibility the company would build a steel mill in WA - as mooted before lower iron ore prices and the mothballing of Oakajee put a dampener on the goal of turning the magnetite-rich Mid West into another Pilbara.

Mr Barnett said senior government officials were in Beijing trying to drum up Chinese investment in Oakajee and he would follow in coming months.

While there were 30 potential magnetite mines in WA, it was likely 10 at the most would get up, the premier conceded.

But investment in the commodity was worthwhile as it would enhance the state's minerals processing capability and had already driven infrastructure improvements in the region.

"Can I say magnetite matters? It's good for the state and it finally builds on that dream of value adding," Mr Barnett said.